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Management Information Systems: UNIT-1 Section-A
Management Information Systems: UNIT-1 Section-A
UNIT-1
Section-A
DEFINITION:
MEANING:
Management:
Management is the art of getting things done through and with the people in formally
organised groups.
Managerial function:
Planning
Organising
Staffing
Directing and
Controlling
Management hierarchy:
strategic
management(top
management)
management
control(middle
management)
operational control(bottom
management)
Information:
Information is data that is processed and is presented in a form which assists decision-
making.it may contain an element of surprise, reduce uncertainty or provoke a manager to
initiate an action.
Data usually take the form of historical records. In contrast to information, raw data
may not be able to surprise us, may not be organised and may not add anything to our
knowledge.
DATA-------→PROCESSING-------→INFORMATION
System:
The term system is the most loosely held term in management literature because of its
use in different contexts. However, a system may be defined as a set of elements which are
joined together to achieve a common objective. The elements are interrelated and
interdependent.
The set of elements for a system may be understood us input, process and output. A
system has one are multiple inputs; these inputs are processed through a transformation
process to convert these input into outputs. The three elements of a system are
INPUT------→PROCESS--------→OUTPUT
2. What are the various functions of information systems?
One of the mostly widely used bases for organising activities in almost every
organisation is the business function. Business activities are grouped around functions
such as production, marketing, finance and personnel etc... Resulting in the respective
department or an area of the business organisation. These departments or functional areas
are commonly known as the functional areas of business.
Production
Marketing
Finance and accounting
Materials and
Personnel systems
Production:
Marketing:
Sales order
Forecasting
Sales analysis
Billing
Distribution
Stock availability
Sales quota control
Pricing
Product promotion
Finance and accounting:
Financial planning
Budgeting
Cost accounting
Asset accounting
Accounts receivable
Payroll
Accounts payable, etc...
Materials:
Material planning
Bill of material
Cost estimate
Warehousing planning etc...
Personnel:
Employee recruitment
Employee selection
Employee development
Employee transfers
Employee retirements etc...
3. Discuss about information system resources.
Section-B
MIS is an information system which process data and converts it into information.
A MIS uses TPS for its data inputs. The information generated by the information system
may be used for control of operations, strategic and long range planning, short range
planning, management control and other managerial problem solving.
Marketing
Production
Human resources
Finance
Accounting etc...
TPS------→DATA------→INPUT------→PROCESSING-------→OUTPUT-----
---→INFORMATION
The Decision support system (DSS) is an information system application that assist
decision making. Decision support systems tend to be designed primarily to serve
management control level and strategic planning level managers.
↘user interface ↙
User
These systems include a wide range of support facilities, which include word
processing, electronic filing, electronic mail, message switching, data storage, data and voice
communication etc...
Typing
Mailing
Scheduling of meetings and conferences
Calendar keeping and
Retrieving documents
In the secondary category,
Conferencing
Production of information
Controlling performance
Business expert system (BES) is a knowledge based information system that uses its
knowledge about a specific, complex application area to act as an expert. This system is
one of the knowledge based information system.
Expert system provides decision support to managers in the form of advice from an
expert in a specific problem area. Expert systems find application in diverse areas,
ranging from medical, engineering and business.
↘user interface ↙
Every legitimate solution will have some advantages is benefits and some
disadvantages or costs. These advantages and disadvantages are identified when each
alternative solution is evaluated. This process is typically called cost/benefit analysis.
Once all alternative solutions have been evaluated the process of selections the best
solution can begin. Alternative solutions can be compared to each other because they have
been evaluated using the same criteria. It is possible that to decide to select the best solution
to the problem.
Implementing a solution:
The final step of the system approach recognized that an implemented solution can
fail to solve the problem for which it was developed. The results of implementing a solution
should be monitored and evaluated. This is called a post implementation review process.
MNC is a firm that operates across products, markets, nations and cultures. It consists
of the parent company and a group of subsidiaries. They are geographically disresed and each
one may have its own unique goals, policies and procedures.
Multinational strategies:
It was a type of “hands off” strategy in which the parent allowed the subsidiaries to
develop their own products and practise. The information flows are primarily from the
subsidiaries to the parent in the form of financial reports.
Global strategy and international strategy is also comes under cost/benefit analysis.
Software resources:
Data resources:
As a consumer you have to deal regularly with the information systems that support
the business processes and operations at the many retail stores where you shop. Example:
most retail stores now use computer based information systems help them record customer
purchase, keep track of inventory, pay employees, buy new merchandise and evaluate sales
trends.
IS also help store managers and other business professionals make better decisions
and attempt to gain a competitive advantage.
Support strategies for competitive advantage:
DIMENSIONS:
Section-A
customer research
market research
competitor intelligence
Competitor’s products.
“ Operating strengths and weaknesses.
“ Customer service level and customer
policies.
“ New product line.
2. Discuss manufacturing information system.
Marketing
Production/operations
Accounting
Finance
Human resource management
Section-B
Transaction processing systems are information system that process data resulting
from the occurrence of business transactions. Transactions are events that occur as part of
doing business such as sales, purchase, deposits, withdrawals, refunds and payments.
For example:
The data generated whenever the business sells something to a customer on credit.
Data about the customer, product, salesperson, and store and so on must be captured and
processed. This in turn causes additional transactions such as credit checks, customer billing,
inventory changes, and increases in accounts receivable balances, which generate even more
data. Thus, transaction processing activities are needed to capture and process such data, or
the operations of a business world grind to a halt. Therefore, transaction processing systems
play a vital role in supporting the operations of an organisation.
Batch processing:
In a batch processing system transaction data is accumulated over a period of time and
processed periodically. Batch processing usually involves.
Conclusion:
A brief description of each of the financial decisions that a financial manager has
to take is given below.
Capital budgeting decision----in this decision funds are allocated to long term asset
which would yield benefits in the future. Example: funds allocated for land, building,
machinery, etc...
Financial decision----the financial manager has to decide about the proportion of
equity and debt capital.
Dividend decision-----this decision relates to the dividend policy of the organisation.
A decision whether the organisation should distribute all profits or retain them or
distribute a portion and retain the balance has to be taken by the financial managers.
Current asset management-----in order to safeguard the org against liquidity or
insolvency current assets of the organisation are also required to be efficiently
managed.
Manpower planning:
Procedures manual
Management accounts / balance sheets
Financial data
Accounting policies
Tax details
Working capital
Types of accounting information system:
Section-A
Data management sub system: Data management sub system includes a database that
contains relevant data for the situation and is managed by software called Database
management system (DBMS).
DSS database
Database management system
Data directory
Query facility
Model management sub system: this is a software packages that includes financial,
statistical, management science or quantitative models that provide the systems analytical
capabilities and appropriate software management
Model
Model base management system
Modelling language
Model directory
Model execution, integration and command processor.
User interface sub system: the user communicates with and commands the DSS through the
sub system. The user is considered part of the system.
Knowledge base management sub system: this sub system can support any of the other sub
systems or act as an independent component.
1. Discuss the role of DSS in business?
The roles of DSS are as follows:
What if analysis: in what if analysis an end user makes changes to variables or
relationships among variables and observes the resulting changes in the values of
other variable.
Goal oriented: it is a process of determining the input values required to achieve a
certain goal.
Risk analysis: risk is important factor which affects the business enterprises. It can be
classified as low, medium and high risk. A DSS is particularly useful in medium risk
and high risk environments.
Model building: DSS allows decision markets to identify the most appropriate model
for solving the problems.
Graphical analysis: this helps managers to quickly digest larger volumes of data and
visualize the impact of various courses of action. They recommend the use of graph
when:
Seeking a quick summary of data.
Forecasting activities
Detecting trends overtime
Composing points and patterns at different variables.
Advantages:
Ability to analyze trends
Augmentation of managers leadership capabilities
Enhanced personal thinking and decision making
Contribution to strategic control flexibility
Ease access to existing information
Instruments of change
Better reporting system
Better understanding of enterprise operations.
Disadvantages:
Functions are limited cannot perform complex calculations.
Hard to quantify benefits and to justify implementation of an
EIS.
Executives may encounter information overload.
System may become slow, large, and hard to manage.
Difficult to keep current data.
May lead to less reliable and insecure data.
Small companies may encounter excessive costs for
implementation.
Section-B
1. What do you mean decision support systems (DSS)? What are the characteristics of
decision support systems?
Meaning:
The term DSS refers to a class of systems, which supports the process of making
decisions. The Emphasis is on “support” rather than on automation of decision. DSS allow
the decision maker to retrieve data and test alternative solutions during the process of
problem solving.
Definition:
According to Scott Morton, “DSS as interactive computer based systems, which help
decision makers utilize data and model to solve unstructured problems”.
Examples of DSS:
Group DSS
Computer support Co-operative work
Logistics systems
Financial planning system
Provide rapid access to information: some DSS provides fast the dashboard of a
car or truck are used to see how the vehicle is running.
Handle large amount of data from different sources: advanced database
management systems and data warehouses have allowed decision makers to search
for information with a DSS even when some data resides in different databases on
different computer systems or network.
Provide report and presentation flexibility: managers can get the information they
want presented in a format that suits their needs. Produce text, tables, line
drawings, pie charts, trend lines, and more.
Support drill down analysis: a manager can get more levels of detail when needed
by drilling down through data.
Perform complex, sophisticated analysis and comparisons using advanced
software packages: marketing research surveys.
Classification of DSS:
File drawer systems: these allow immediate access to data item. They are
basically online mechanized versions of manual filing systems.
Data analysis systems: these allow the manipulation of data by means of either
analysis operations tailored to the task or setting or general analysis operations.
Analysis information systems: these provide access to a series of data base and
small models.
Accounting models: these calculate the consequences of planned actions on the
basis of accounting definitions. They typically generate estimates of income,
balance sheets, etc., based on variation in input values to the definitional
formulas.
Representational models: these estimate the consequences of action on the basis
of models that represents some non-definitional characteristics of the systems
such as probabilities of occurrence.
Optimization models: these provide guidelines for action by generating the
optimal solution consistent with a series of constraints.
Suggestion models: these compute a specific suggested decision for a fairly
structured and repetitive decision.
Steps in constructing a DSS:
Advantages:
Limited storage capability: due to its small memories and limited storage
capabilities, DSS has definite computational constraints.
Slow: it is slow compared to the speed of large mainframes.
Limited information sharing: most DSSs are designed for individual use
but they can be designed so that several computers can be linked for
limited information sharing.
Difficult: it is difficult to know interdependencies of functions provided by
system.
Require extensive knowledge: there are applications that require
extensive knowledge of specific problem domain or technical knowledge.
Translation problems: users have to deal with several databases and
model each with different data models and resulting translation problems.
Confliction: users may have to work on several decision scenarios at same
time. As a consequence they have to keep track of what they done for each
of them.
Meaning:
ESI are information systems that combine many of the features of MIS and DSS. When
they were first developed their focus was on meeting the strategic information needs of top
management. In some cases and EIS also called executive support system.
Definition:
According to Matthews and Shoe Bridge, “EIS is a computer based information delivery
and communication system designed to support the needs of top executives”.
Characteristics of EIS:
Section - A
Differentiate:
Innovate:
Promote growth:
Differentiation strategy:
Innovation strategy:
Finding a new ways of doing business. this may involves the development of
unique products and services or entry into unique markets or market niches.
Alliance strategy:
Lower costs:
Use IT to substantially reduce the cost of business process.
Use IT to lower the costs of customer’s suppliers.
Differentiate:
Innovate:
Section - A
The planning process can be quite difficult and time consuming. That’s what gives
organisations the “we don’t have time to plan” excuse for using a formal planning process. So
vendors have developed CAP tools to help ease the burden of planning.
Integration of the enterprise has emerged as critical issues for organisations in all
business sectors striving to maintain competitive advantage. Integration is the key to success.
it is the key to unlocking information and making it available to any user, anywhere, anytime.
4. Explain about enterprise resource planning (ERP).
Operating system, the equivalent of the windows operating systems for back office
operations. ERP is a cross functional enterprise system that serves as a framework to
integrated and automate many of the business processes that must be accomplished within
the manufacturing, logistics, distribution, accounting finance and human resources functions
of a business. Companies are finding major business values in installing ERP software in two
ways:
IRM has become a popular way to emphasize a major change in the management
and mission of the information systems function in many organisations. managing the
information system resources of an organisation is a vital concepts in today’s business
environment, because of three major developments that are affecting how corporate
management views the information systems function.
Section-B
IRM has become a popular way to emphasize a major change in the management
and mission of the information systems function in many organisations. Managing the
information system resources of an organisation is a vital concept in today’s business
environment, because of three major developments that are affecting how corporate
management views the information systems function.
Resource management
Technology management
Distributed management
Functional management
Strategic management.
Resource management:
IRM views data, information, and computer hardware, software and personnel as
valuable resources that should be effectively and efficiently managed for the benefit of the
entire organisation. If plant and equipment, money, and people are considered valuable
organisational resources so should its data, information, and other information system
resources.
Technology management:
IRM emphasizes that all technologies that process and deliver data and information
must be managed as an integrated system of organisational resources. Such technology
includes telecommunications and office system as well as computer based information
processing. These “island of technology” are bridged by IRM and become a primary
responsibility of the executive in charge of all information services, sometimes called the
chief information officer (CIO) of the organisation.
Functional management:
The IRM concept stresses that the management of an organisation must apply
common managerial functions and techniques to the management of information resources.
Managers must be managerial techniques just as they do with other major resources and
activities of the business.
Strategic management:
Finally the IRM concepts stresses that the information services function in the firm
must be more than a provider of computer services. It must also make major contributes to
the profitability and strategic objectives of the firm. Information resources management
focuses on developing and managing information system that significantly improve
operational efficiency promote innovative products and services and build a strategic
information resources base that can enhance the competitiveness of the organisation.
2. Explain about customer relationship management (CRM).
Meaning:
Definition:
Processes in CRM:
Advantages of CRM:
Disadvantages of CRM:
Record loss
Overhead
Training
Objectives of e-governance:
Domains of e-governance: